Jiuzi Holdings, Inc. — FY2023 Form 20-F
Period: Fiscal year ended October 31, 2023. This is an annual report, not a standalone 2023 fourth-quarter report; it does not provide clear Q4-only financial results. Financial statements are prepared under U.S. GAAP and presented in U.S. dollars.
Business context
Jiuzi is a Cayman Islands holding company whose China-based subsidiaries sell new-energy vehicles (NEVs) and franchise Jiuzi-branded retail stores, primarily in third- and fourth-tier cities. At the report date, it cited 72 operating franchise stores and two company-owned stores. The VIE structure was dissolved on January 20, 2023, when Zhejiang Jiuzi became a wholly owned subsidiary of the WFOE.
Financial performance and position
| Metric | FY2023 | FY2022 |
|---|---|---|
| Revenue | $5.931 million | $5.923 million |
| Gross profit (loss) | $1.339 million | $(0.394) million |
| Gross margin | 22.57% | (6.64)% |
| Operating loss | $(9.500) million | $(16.671) million |
| Net loss from continuing operations | $(9.854) million | $(16.362) million |
| Net loss attributable to controlling interest | $(9.389) million | $(16.832) million |
| Operating cash flow | $(5.476) million | $(8.873) million |
| Cash, cash equivalents and restricted cash | $1.184 million | $2.321 million |
| Total assets / total liabilities | $11.390 million / $7.091 million | $15.326 million / $9.245 million |
Revenue was nearly flat, but its mix changed: NEV sales fell 19.7% to $4.508 million, while initial franchise fees rose to $1.335 million from $0.284 million. Vehicle sales generated a gross loss of $33,394 (negative 0.74% margin); franchise fees generated $1.334 million of gross profit. No franchise royalty revenue was recorded. Management attributed the reduction in net loss chiefly to lower bad-debt provisions and expenses, though the year included a $4.417 million provision for credit losses on loans to franchisees.
Current assets were $10.472 million and current liabilities $6.729 million. Current assets included $4.367 million of net related-party franchisee loans, after an $11.554 million allowance against gross loans of $17.993 million. Taxes payable were $2.687 million. The convertible debenture balance was zero at year-end, versus $2.835 million in FY2022; lease liabilities totaled approximately $0.391 million.
Investing activities provided $1.281 million and financing activities provided $3.189 million. Cash declined by $1.006 million before the $0.176 million adverse exchange-rate effect. The company raised capital through share issuances during the year.
Material changes, outlook and risks
- Management plans to expand regional sales centers, centralize procurement, broaden NEV brand offerings, attract franchisees and raise capital. These are plans, not quantified guidance; management cautioned that financing and execution are uncertain.
- The auditor identified substantial doubt about the company’s ability to continue as a going concern, citing the $18.660 million accumulated deficit and $9.500 million operating loss. Management expects financing and strategic actions to support liquidity, but gives no assurance they will succeed.
- Liquidity depends in part on collecting franchisee loans and other receivables, maintaining supplier and bank support, and raising capital. A substantial portion of reported revenue was related-party revenue: approximately $4.304 million, or 73% of total revenue, based on the filing’s customer-type breakdown.
- The company reported supplier litigation over vehicle advances totaling $3.124 million in stated amounts; several cases were described as successful or settled, but recovery remains subject to collectability. It also reported prior supplier-advance write-offs and FY2023 inventory write-downs of $60,836.
- Internal control over financial reporting and disclosure controls were assessed as ineffective due to insufficient accounting and finance personnel with U.S. GAAP experience. Management proposed hiring qualified staff; the auditor did not attest to internal control effectiveness.
- Material structural and jurisdictional risks include evolving PRC rules on overseas listings and operations, restrictions or intervention affecting cash transfers, foreign-exchange controls, and potential U.S. trading or delisting consequences if PCAOB inspection access changes. The filing states no PRC approvals had been denied and that the company was not then required to obtain the identified permissions.
- After year-end, the company closed a private placement on December 21, 2023 described as approximately $50 million in units with warrants. This is not FY2023 operating cash. Subsequent equity-plan awards and share consolidations also affect share-count comparisons.
Most important facts for investors to verify
- Reconcile the filing’s reported revenue composition and related-party sales with underlying customer, franchisee and transaction records; confirm collectability of the $4.367 million net franchisee loans and adequacy of the allowance.
- Check current cash, working-capital needs, taxes payable, supplier-advance recoveries and the status of management’s financing plans against the going-concern warning.
- Verify the closing proceeds, warrant terms, dilution and updated share count from the December 2023 private placement, later equity awards and subsequent share consolidations.
- Clarify the identity, approval, consideration and accounting for the subsidiary dispositions: the filing describes a $151,580 disposal with a $619,121 gain and separately refers to a $6,000 sale to the chairman.
- Track remediation of the disclosed internal-control material weakness and confirm that future filings and audits address it.